The Difference Between First-Party and Third-Party Insurance Claims

If an unexpected incident occurs, you may need to file an insurance claim in pursuit of compensation for your losses and expenses. Depending on the parties involved in your case, it may be classified as a first-party or third-party insurance claim. The distinction between these two categories lies in who is being held responsible for an injury: your own insurance provider or someone else’s.

What Is a First-Party Insurance Claim?

A first-party insurance claim is between only the policyholder and his or her insurance carrier. If your house gets damaged in a storm in Denver and you need to file a claim with your homeowners insurance provider, this is a first-party claim. In a first-party claim, you must negotiate with your own insurance company to recover fair compensation for your losses.

The first-party insurance process generally requires a claim to be filed and proof of losses to be submitted to the insurer. The insurance company will assign a claims adjuster to review the claim and investigate the incident. Then, the insurance company will decide whether to accept or reject the policyholder’s claim. 

The losses covered and the amounts of insurance available will depend on the specifics of the policy. If you only have liability insurance on your automobile insurance policy, for example, this will not cover your own losses if you are at fault for a car accident in Denver. It is important to read and understand the terms of your policy before entering into settlement negotiations.

What Is a Third-Party Insurance Claim?

A third-party insurance claim is brought against someone other than the policyholder. This could be anyone who is at fault for causing the accident. Examples include at-fault property owners, motor vehicle drivers, businesses, employers, product manufacturers and government agencies. 

If you file a third-party claim, you are the third party who is seeking compensation from another person’s insurance company (the second party) due to the liability of the policyholder (the first party). This type of claim typically arises when the policyholder is found to be legally and financially responsible for causing harm to a third party, or the person filing the claim.

If you get into a car accident that is caused by another driver violating a traffic law, contacting that driver’s insurance company to file a claim is an example of a third-party claim. This type of claim could result in compensation for your medical expenses, property repair costs and lost wages. In a severe accident, you may also be eligible for pain and suffering.

Which Type of Insurance Claim Is Right for You?

If someone else is responsible for causing your losses through an act of negligence, or the failure to act with proper care, you likely have grounds for a third-party claim. If you are at fault or the at-fault party does not have adequate insurance, a first-party claim would be more appropriate.

There may also be situations where you can file both types of claims; for example, if an at-fault driver’s coverage is not adequate for your losses, you may be able to file a first-party claim with your own insurer for supplemental coverage.

How Can a Personal Injury Lawyer Help?

Determining whether you should file a first-party or third-party insurance claim after an accident in Colorado takes an in-depth investigation into the cause. You may need assistance from a Denver personal injury attorney to determine fault and identify the liable party or parties.

An attorney can conduct a thorough investigation of your accident to identify all potential sources of financial compensation. Then, your lawyer can take over the claims process to maximize your recovery. You can count on your attorney to fight for fair compensation on your behalf while you focus on healing.